Could the Consequences of Trump’s Travel Ban Include Increased IT Outsourcing, Higher Salaries?

By Aliah D. Wright Oct 2, 2017
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When the Trump administration banned people from certain countries from entering the United States, tech firms complained that they would have a harder time recruiting IT workers from overseas. Foreign workers, the firms reasoned, even those from countries that were not part of the ban, would not feel welcome in the U.S.

Now, some recruiters are saying that companies are outsourcing more work abroad and depending more on IT firms based overseas.

Meanwhile, some U.S. IT workers say they are finding new jobs at higher pay levels as demand for a shrinking labor pool increases. Others, though, say the increases in IT salaries could just be the result of overall economic improvement.

According to the American Immigration Council, the share of foreign-born workers in the science, technology, engineering and math (STEM) workforce, which includes those in the computer industry, has doubled since 2015.

The U.S. Census Bureau's 2014 figures—the most recent figures available—reveal that 24 percent of U.S. IT workers are foreign born. More than a third of Silicon Valley's population is made up of foreigners, studies reveal.

And although a spokesman for the U.S. Bureau of Labor Statistics told SHRM Online that the agency no longer tracks jobs moving overseas, some firms that outsource IT talent say they've seen an increase in outsourcing.

Outsourcing Rises

"Multiple employees from Germany, France and India [who were working in the U.S.] started to move back after Trump was elected," said Trave Harmon, CEO and founder of Triton Computer Corporation, a managed IT provider in Worcester, Mass, which provides IT talent and services for other companies. "By February, we were replacing individuals at about two every three days for existing clients."

Envoy, a global immigration services provider based in Chicago, reports that 21 percent of employers are relocating work overseas. The company's 2017 Immigration Report also reveals that 30 percent of respondents have increased budgets and 25 percent have increased staff to address immigration challenges.

Citing a "massive increase" in business, Harmon said, "we began a hiring spree. … In the last two months alone, our outsourcing [began outpacing] our standard product and service plan offerings."

Said Harmon: "We are finding businesses … are not willing to send their people into the United States—even with full documentation and legalities resolved—because they don't want to run the risk of any legal problems" now or in the future.

 

[SHRM members-only toolkit: IT Staffing]


Paychecks Get Bigger

IT hiring and pay are also booming, experts say.

"Thank God for Trump," said David Davis, a freelance software engineer and app developer in Philadelphia. He says that since Trump's travel ban, recruiters have come calling for his services—and they are willing to pay more than ever.

"In January, the minimum salary I would take for a full-time position was $120,000 or above. Today, I know because of the ban I'm going to walk away with between $150,000 and $200,000. I've had companies fight over me because I have 25 years' worth of experience."

Harmon said that salaries are increasing by about 20 percent to 40 percent for U.S. IT workers—depending on what skill sets those candidates possess and the roles they perform.

Ed Szofer, CEO of SenecaGlobal, a Chicago-based technology services company that provides onshore and offshore IT support, says the ban has made U.S. IT workers more marketable, but workers still "need to be the complete package." Having "good technical skills ... is often not enough in today's market—even if you're based in the U.S. To be truly marketable, you need to have the soft skills required by today's agile teams. That means you must have good communication skills, be a good team player, etc."

IT Salary Snapshot: Philadelphia

According to Robert Half Technology, an IT staffing services firm based in Menlo Park, Calif., the current pay range for software engineers in Davis' city is between $117,000 and $197,000.

Davis pointed out that "if you look on Indeed.com, there are job openings for senior software engineers in Philadelphia that list salaries between $140,000 and $160,000—I've never seen salaries this high and jobs being posted at this frequency."  

Others, however, are skeptical that the increase in salaries for U.S. IT professionals and the increase in outsourcing can be attributed solely or even at all to present political developments.

"I don't think [the ban] has had any impact," said Steve Levy, an expert on IT recruitment who works as a recruiter for Lockheed Martin, an aerospace and defense company based in Bethesda, Md. "There are other factors that may be impacting outsourcing and hiring. The economy has gotten better," he said, adding that while many may take umbrage at Trump's policies, workers are making personal choices. "I'm just not certain that what you're seeing is all on Trump."

Levy cautions that increases in salaries depend on the roles being filled.

"There are certain roles that are clearly in demand, and there will always be positions that are more in demand than others," he said. "It's cyclical."

 

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